An investor of Active Power has filed a complaint alleging the flywheel UPS maker made false and misleading statements about the company’s success in expanding its business into the Chinese market.
According to the complaint filed in the US District Court for the Western District of Texas, CEO Doug Milner, announced that Active Power had entered into a strategic distribution agreement with China’s largest IT solutions provider, Digital China Information Service Company.
Further, Mr. Milner emphasized that collaborative efforts with Digital China were under way that would lead to product deployments by the end of 2013. As a result, Active Power shares traded at artificially inflated prices during the April 30, 2013 to September 5, 2013 (the ‘Class Period’).
On September 5, according to the complaint, Active Power retracted its 2013 guidance based on disappointing results from the company’s distribution relationship in China. Moreover, the company also revealed that its April 30, 2013 announcement that it had entered into a partnership with Digital China was incorrect. The agreement was with an unrelated entity, Qiyuan Network System Limited.
